Dear Clients. Dear Friends

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1 August / September 2013 Dear Clients Dear Friends Having embarked for new shores with our expanded team, we are happy to be able to include you in our progress and send you the next edition of our Newsletter. In the previous Newsletter dated June / July 2013 we presented our new partner, Dr Thilo Pachmann. In the following editions of our Newsletter you will have the pleasure of meeting every single one of our attorneys at law, each bringing their unique skills and talents to the firm, and for you, our clients and friends. In this issue we present Dr Christian Fraefel a valued member of our team since 1 October Following great interest in our report in the previous Newsletter regarding the lifting of the doping ban against the cross-country skier Andrus Veerpalu and the decision of the Court of Arbitration for Sport, we will delve a little deeper into this case and report in more detail. Furthermore, we are reporting on a recent decision of the Swiss Federal Supreme Court regarding the personality and the honour of organisations. As the honour of a company is closely linked to their executives, we consider a recent trend to award all employees with some CXO title. The older editions of the Newsletter are available on our website in the archive section. You can also find links to enter a new address or unsubscribe if you so wish. We would be delighted if you wanted to forward this newsletter to friends and acquaintances. The link can be found at the end of this Newsletter. For further information on the issues raised as well as all other questions on Swiss law, please contact us at any time. We look forward to the continuation of our valued relationship. Yours Pachmann Lawyers Team

2 Content People: Dr Christian Fraefel, attorney at law News: Can the honour of a company be injured? by attorney at law Florian Rohrer Legal: Acquittal of Andrus Veerpalu: New standards for the indirect detection of doping by attorney at law Dr Thilo Pachmann Curiosities: CXO Titles: Any more for any more? by attorney at law Dr Titus Pachmann People... Dr Christian Fraefel, attorney at law Christian Fraefel completed his law studies at the University of Zurich and the University of Lausanne, graduating in Subsequently he worked as a research assistant, mainly in the field of national and international civil procedure law, debt collection law and civil law for two and a half years under the guidance of Prof. Paul Oberhammer at the University of Zurich. During this time Christian was able to successfully complete his thesis entitled "The enforcement of a non-existent debt", the detail of which is devoted to unjustified enforcement procedures and their correction by damage and unjust enrichment claims. Furthermore, Christian worked at the District Court of Horgen as a clerk before he passed his bar exams in Christian specialises in criminal law, criminal procedure and rules of civil procedure. He advises and represents clients in penal cases, in family disputes as well as in numerous facets of civil law claims. Christian is also an adjunct professor of civil procedure at the University of Zurich and is the author of various publications, including commentator on the Code of Civil Procedure and the Code of Obligations. Christian s strength, discipline and sense of order and justice are mirrored in his military career where he was a commander of a mechanised infantry company between the years He is currently employed as head of operations in a tank battalion. Moreover, he works as a substitute judge at the Military Court of Appeal, where he leads military criminal proceedings.

3 News... Can the honour of a company be injured? by Florian Rohrer, attorney at law In a recent judgment, the Swiss Federal Supreme Court clarified the controversial question of whether organisations (companies, associations, etc.) as a result of personal injury, may be entitled to compensation. In this particular case, a former employee of a company, which operates in the maritime trade, had posted images which showed two directors in casual clothes in front of rusted and dilapidated ships on the internet. For that, he used a domain, which used the name of said company. In Switzerland, compensation payments may be awarded only for the proven damage. In addition, however, the court may, in cases of killing a man, grievous bodily harm, or injury of personality (the honour of the person) bestow compensation for the non-measurable, mental anguish or the intangible wrongs inflicted on the client. This is why, in recent years, it has been controversially discussed; whether organisations can claim compensation for the injury of their personality, since they do not have feelings and thus cannot suffer in the same way as humans in a case of defamation. The Supreme Court came to the conclusion that if a director s personality is injured in his role as a corporate body, this may require compensation in the name of the Organisation. Organisation and person form a unit in this regard. Due to this decision, the legal fact that corporate bodies act for the company must be supplemented accordingly: The directors and other corporate bodies now feel for the company, too! Whether in the future organistions can demand and be awarded compensation in general or, as in this individual case, only under the condition that the organisation and the corporate body were vilified at the same time has yet to be decided by jurisprudence. The Federal Court also had to determine the amount of compensation, a difficult task in light of the inconsistent case law in this regard. Still, their approach was completely inappropriate. It compared the mental anguish of the company injured in its personality with that of a child, who suffered the loss of its murdered mother and who had received a compensation of CHF 20'000. Against this backdrop, the compensation awarded by the lower court in the amount of CHF 25'000 seemed to be excessive and the reduction to CHF 10'000 adequate. Surely, there would have been more appropriate precedents to refer to. Link to judgement (in French)

4 Legal... Acquittal of Andrus Veerpalu: New standards for the indirect detection of doping by Dr Thilo Pachmann, attorney at law On the 25th March 2013 the Court of Arbitration for Sport (CAS) acquitted Andrus Veerpalu, Estonia's most famous and most successful crosscountry skier, of charges for the use of growth hormones. Although the panel recognised weighty indications for the use of growth hormones, WADA was not able to prove the reliability of the threshold values for the growth hormone test. This was surprising as previous rulings found 12 other possibly innocent athletes as guilty based on the very same growth hormone test. The growth hormone test is not a direct doping test with which the use of illegal substances is detected, but a doping test which monitors blood values which, when found to be outside of the normal range, may indicate the use of illegal substances (in this case due to an unusual relationship between the differently sized growth hormone molecules). With such indirect evidence it is far harder to establish the actual use of illicit substances than with direct testing since the unusual blood values may also be a result of particular circumstances. For example unusual genetic features, as observed with the famous German speed skater Claudia Pechstein. In its decision the panel stated that with regard to the WADA code, in principle the antidoping authorities carry the burden of proof for the existence of anti-doping rule violations. This applies also for the burden of proof concerning the reliability of the growth hormone testing, including its decision limits. It is therefore clear that the anti-doping authorities must always prove not only that the illegal substance was used but also that the actual test for the drug works reliably. The panel held further that a violation of anti-doping rules must be proven by a probability of 99.99%. The growth hormone doping test is only allowed to lead to a false positive in 1 of 10'000 cases. Despite generous help from the panel, there were two additional rounds of written briefs after the hearing; FIS did not succeed in convincing the panel that its decision limits were

5 calculated correctly. The panel came to the conclusion that the present number of underlying blood tests, in three studies in total less than 500 tests were performed, could not confirm the certainty for the use of growth hormones of 1:10'000. In addition, it remains unclear on what grounds certain (exceptional) blood values were excluded from the data to calculate the decision limit. The procedure of WADA to establish the decision limit raises in particular the question whether it should be allowed to set decision limits without these limits having been confirmed by a completely independent control study. In this case 12 athletes had already been accused and banned for the use of growth hormones, based on said test! It remains unclear whether these athletes will now be rehabilitated by their sport associations or whether they will have to appeal to a court themselves, based on this decision. In order not to open the flood gates for the use of growth hormones, the panel referred in an obiter dictum to the newly developed biomarker growth hormone test. It is hoped that this test is checked with the necessary care before use. It is a real shame that twelve potentially innocent athletes were wrongly sentenced based on inaccurate test parameters due to lack of proper scientific test validation. Link to Arbitral Award (in English)

6 Curiosities... CXO Titles: Any more for any more by Dr Titus Pachmann, attorney at law In Switzerland an ever-growing group of managers carry one of the many CXO titles. Those each begin with "Chief" and end with "Officer". However, in the Swiss Commercial Register only the Chairman of the Board, Board member, Delegate, Director, Authorized Representative and "Prokurist" can be incorporated, whilst a CEO (Chief Executive Officer) will be searched for in vain. Only a few people still know what a Prokurist is (a kind of a public proxy for employees, which is published in the Commercial Register). Nevertheless, the use of titles such as CFO (Chief Financial Officer) or COO (Chief Operating Officer) is spreading. In Addition, new titles are being created by the minute: I = Information, T = Talent, P = Purchasing, G = Growth, S = Security, each combined with Chief and Officer. The trend of euphemisms which is also reflected in other English terms such as "Personal Coaching", "Facility Manager", "Personal Assistant", etc., are now firmly embedded in today's semantic culture and are apparently spreading further in the corporate world. Anyone can invent a nice title and then of course he or she is the Head Honcho, regardless of whether he is chief of a 2000 person strong company or the chief of himself alone. For many even a salary increase was saved by bestowing a suitably grand title... In Austria there are not only "Privy Councillors", but also "Genuine Privy Councillors". Evil is to him who evil thinks.

7 Do you have any questions or suggestions? We are looking forward to hearing from you. Dr Titus Pachmann Dr Thilo Pachmann Aurelia Schmid Dr Christian Fraefel Florian Rohrer Angelika Huser Stefan Etter 2013 Pachmann Rechtsanwälte AG Löwenstrasse 29 CH-8021 Zürich Tel Fax